Managing your money and making big financial decisions can be daunting. It’s difficult to know when you need the support of a dedicated advisor to guide you through complex financial issues, such as investing for retirement or allocating your income effectively. Failing to have a trusted financial professional supporting you when you have to make a life-changing decision could end up being disastrous. At the same time, these advisors aren’t cheap, and hiring one could put a strain on your budget that you can’t afford right now. So, if you’re stressed trying to decide whether to hire a financial advisor, stop worrying. Here’s a great guide for finding the best financial advisors for your situation.
When You Need an Advisor
Having a financial advisor is a good idea in a number of circumstances. For example, you may be at a pivotal moment in your life, such as when you start a career, are getting married, or you’ve accumulated a significant amount of cash or retirement savings (say, as a rule of thumb, $50,000 or more) and you want to put it to the best use possible. A financial advisor’s expertise could help put you in a better financial position in the long-term.
It may also make sense to hire a financial advisor if you’re making a substantial amount of money and simply don’t have the time to manage it effectively. An advisor can give you peace of mind that the money you’re accumulating is going to good use to secure your future. Even if you feel capable of managing your own money, it could still make sense to hire a financial advisor, as an experienced second set of eyes could assess how you’re managing your assets and provide you insights that you may have overlooked.
One final consideration of hiring an advisor is whether you can afford one. Having a dedicated advisor to help you manage all your finances is going to cost you; many advisors charge about 1% of the value of a person’s managed assets in exchange for services, although the rates can vary. So, before you hire a financial advisor for any reason, ensure you’re willing and able to bear the costs of having one.
When You Need a Robo-Advisor
Sometimes, your financial situation doesn’t merit a dedicated financial advisor, but you still could use expert assistance of some sort. In these cases, it may make sense to use a robo-advisor. A robo-advisor is a service offered by many financial institutions, and it provides expert assistance with limited human intervention. Robo-advisors rely heavily upon artificial intelligence and other cutting-edge technology to deliver the services that people need to underpin their financial decision-making and achieve their long-term goals.
Robo-advisors can be a good choice for people who can’t afford a financial advisor but still want assistance to pursue some sort of long-term goals. They’re also effective for people who don’t have the income or assets to merit a dedicated financial advisor. These services can help you automate your investing and bill paying processes to save time and keep you on track to achieve your financial objectives.
However, in most cases, you won’t be able to obtain detailed financial advice from a robo-advisor; instead, these services will assist you in following goals and objectives you’ve already decided upon, such as the aforementioned investing and bill paying. Additionally, while costs are modest, you’ll almost certainly have to pay for robo-advisor services. If your finances don’t merit the cost or are so complex that you need dedicated assistance, it may make sense to skip the robo-advisor service or hire a financial advisor.
Going It Alone
There are also times when it may make sense to forego the services of a financial advisor or robo-advisor and handle your financial matters alone. If you feel that you have the requisite expertise and time to manage and invest your own money, then paying for additional services may not be necessary. If you’re at a point in your life when your finances are sufficient to cover your current and future needs and you don’t expect to make or require additional changes, then you probably don’t need additional assistance.
Sometimes, you may need a little bit of help to solve a finite problem. For example, if you’re struggling with credit card or other debts, you may just need specific help with your debt problem. In that case, perhaps a little work with a credit counselor or debt settlement company is in order, instead of the full-blown and costly services of a financial advisor. Additionally, if you’re merely concerned about dealing with taxes or tax problems, your accountant may be all you require to address your issues.
Time to Meet Your Goals
The best financial advisors can help you make the most of your money and plan for your future, but you don’t always need them. Sometimes, all people need is a good robo-advisor service to meet their requirements, while many more people can handle their finances with no outside assistance at all. So, determine what your requirements are to manage your financial situation. Then, allocate the appropriate time, energy, and resources to meet your goals.